TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 179
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....te, the process of packing/repacking and labelling/re-labelling of containers or adoption of any other treatment to render the footwear marketable to the consumer were exempted from the duty under Notification No.6/02-CE dated and 5/06-CE dated 1.3.2006. The said exemption was subjected to certain specified conditions of the said notifications. The said notification exempts footwear subjected to only one or more of the following processes, namely: (i) packing/repacking (ii) and labelling/re-labelling of the containers (iii) adoption of any other treatment to render the footwear marketable to the consumer. The notification further provides for the condition that the footwear should have been: (i) bearing a brand name or trade name of any person, (ii) in respect of which retail sale price has been declared and (iii) on which appropriate duty of excise or as the case may be, the additional duty has already been paid. Summary of time period and amount in question along with grounds for such demand is mentioned herein under: Period involved Ground for confirmation of duty July 2005 to June 2006 Non-availment of exemption and paying excise duty thereby availing cenvat credit Nov....
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....y the appellant is optional and bar of section 5A of the Act is not applicable. Thus, the appellant has option to duty, the credit cannot be denied to the appellant. To support her contention, she relied on the decision of the Tribunal as well as High Court of Bombay: (i) Balkrishna Paper Mills Ltd. Vs. CCE, Thane-2015 (329) ELT 468 (Tri.-Mum.) (ii) Padmavati Pulp and Paper Mills Vs. CCE, Thane-2015-TIOL-2434-CESTAT- MUM (iii) Indian Seamless Metal Tubes Ltd. Vs. CCE, Pune-III-2013-TILO-2208-CESTAT-MUM (iv) Mahindra and Mahindra Ltd. Vs. CCE, Mumbai-2015 (321) ELT 51 (Bom.) (v) Arvind vs. Ahmdeabad-III-2016 (334) ELT 146 (Tri.-Ahmd) (vi) MMM Coaches Ltd. vs. CCE, Panchkula-2008 (231) ELT 506 (Tri.-Del.). 5. She further submits that the decision in the case of M.R. Tobacco Ltd. vs. Union of India-2007 (213) ELT Al 15 (SC) is not applicable to the facts of the case. 6. It is her further submission that the credit availed and utilized for payment of duty, cannot be required to be reversed in view of the decision of the Hon'ble Bombay High Court in the case of Ajinkya Enterprises-2013 (294) ELT 203 (Bom.). It is her further submission that without prejudice to the above sub....
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....n issued by invoking the extended period of limitation, therefore, the demands for the extended period of limitation are not sustainable. The penalty is also not imposable on the appellant. 9. On the other hand, learned AR reiterated the findings of the impugned order. 10. Heard both sides and considered the submissions. 11. On careful consideration of the submissions, the following issues emerge: (1) Whether as per section 5A (1A) of the Act, the appellant is duty bound not to pay duty under Notification No.6/02-CE dated 1.3.2002 and 5/06-CE dated 1.3.2006 and consequently, the appellant is not entitled to avail credit. (2) Whether in the facts and circumstances of the case, the appellant is liable to pay 10% of the value of exempted goods or not. Issue No.1 12. The facts of the case are not disputed that the appellant is importing footwear and engaged in the activity of packing/repacking and labelling/re-labelling of the goods and the said activity amounts to manufacture as per section 2 (f) (iii) of Central Excise Act, 1944. The only dispute with regard to that, that Notification No.6/02-CE dated 1.3.2002 and 5/06-CE dated 1.3.2006, the activity of packing/repacking and l....
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....is absolute." 14. We hold that the benefit of notification is optional to the appellant and the appellant is not entitled to avail the benefit of notification, in that circumstance, it cannot be said that the goods are exempted goods. As we have held that the goods are not exempted goods, therefore, the appellant has correctly paid duty on the said goods, consequently, the credit cannot be denied to the appellant. Therefore, we hold that the demand of Rs. 1,96,83,096/- is not sustainable. The same is set aside. Issue No.2 15. The allegation against the appellant is manufacturing both dutiable as well as exempted final products and availing the credit on inputs and input service and not maintaining the separate accounts for inputs and input services. Therefore, the appellant is liable to pay 10% of the value of exempted goods. The appellant during the course of investigation, in its statement as well as during the proceedings before the adjudicating authority has categorically stated that the activity of packing/repacking and labelling/re-labelling of the goods has been done in the separate godown and on packing material the appellant has not taken the credit. The invoices have a....
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.... were using common inputs such as packing material as well as input services in both types of footwear without maintaining the separate records. The contention of the appellants is that the exempted and dutiable goods were not manufactured by the appellants in the same premises and the inputs in the form of packing material were received separately in respective godowns. In respect of input services, it is submitted that the appellant has availed the Cenvat Credit on such services as are used exclusively for manufacturing of dutiable goods and in respect of common services, the appellants has reversed the Cenvat Credit on proportionate basis. I find that the appellants submissions that they have not manufactured exempted and dutiable goods in the same premises is not borne out by facts. Sh. M. M. Gulati, Manager and authorized signatory of the noticee in his statement dt. 04.10.2004, which has not been retracted, had stated that all the functions related to imported footwear including receipt and dispatches are carried out on behalf of the appellants at registered premises as well as godown at Namastey Chowk, Karnal Paragraph 6 of the show cause notice is relevant in this regard an....
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....n such as input stock register, unpacked/ unlabelled imported footwear stock account and packed/relabeled finished footwear stock account in respect of exempted footwear repacked/relabeled at their respective godowns." 20. As for the credit on input services used by the appellants, they have admitted that they have availed credit on input services commonly used by them for manufacture of dutiable footwear and exempted footwear and no separate account was maintained by them as was the requirement of Rules 6(2) of Cenvat Credit Rules, 2004. The noticee has debited an amount of Rs. 2,10,901/- on account of Service Tax attributed to the services used in the manufacture of final products. In view of the judgments cited by the noticee, reversal of proportionate credit is deemed to be equivalent to credit not availed. 21. In view of the above, I hold that the assessee is required to pay Cenvat Credit on the inputs which were used for exempted as well as dutiable products at the rate of 10% of the sale price of the exempted goods. 22. As for the extended period, same is applicable only for the period for November, 2004 to June, 2005 and not for the rest of the period. The appellants wer....